SIM cards identified as a growing market

LONDON  The mobile communications market as a whole may be suffering, notably as regards subscriber growth, but shipments of SIM cards are powering ahead, having reached record levels in 2008 and set to continue growing this year, according to market trackers IMS Research (Wellingborough, England).

Global shipments of the chip cards are said to have reached 3.07 billion last year, and IMS expects volumes to rise by 419 million this year, pushing the market to a new high of 3.49 billion.

This is happening even as handset shipments have declined significantly and are expected to suffer another bad year.

"Much of this is down to the simple fact that the cost of providing a SIM card is much lower than that of providing a handset," said IMS Research Director, John Devlin.

"With this level of price differential a SIM-only proposition is a much more attractive option for both network operators and consumers. It saves the operator the cost of subsidising a handset to make it more affordable for end-users, whilst providing a way to continue to sign up new customers – and perhaps more importantly re-sign existing ones."

Devlin notes that this is contributing to the increasingly competitive grey area between operators and handset manufacturers.

Operators have traditionally relied on new handsets to support new services and attract customers. However, developments mean that consumers taking advantage of SIM-only offers need not miss out on new services if they retain existing handsets, explains Devlin.

Late last year Sagem Orga announced that it was partnering with BlueSky Positioning for A-GPS-enabled SIM cards to deliver services such as “buddy finder”, dating and nearest shop/restaurant/ATM.

And earlier this year Oberthur Technologies launched a SIM card enabled with an accelerometer which will enhance applications and interactive services requiring motion sensing capabilities.

As for mobile handset shipments, IMS anticipates the market will shrink by 7.8 percent this year to reach 1.09 billion, in line with recent estimates from other market trackers such as Strategy Analytics and Gartner.